What You Should Know About ESCOs

More than a million business and residential customers in New York State are now purchasing their electricity and natural gas from an energy service company (ESCO). ESCOS can be found in a variety of ways, one of which can be on energy price comparison websites.

Learning about the competitive energy marketplace, and how to take advantage of it, requires understanding of some basic information.

Your energy bill consists of two parts – supply and delivery. You can purchase your energy supply from either an ESCO or your local electric or gas utility. The delivery portion of your energy service will continue to be provided only by your distribution utility. The ESCO can act as an energy helpline, giving customers an opportunity to compare energy prices between various suppliers.

There are many ESCOs providing a wide variety of “products” and price options. Some provide long-term fixed prices; others offer variable rates that change with market conditions; others give the option for customers to lock-in a rate during certain peak months of energy use. Some ESCO service is provided at a variable price on a month-to-month basis that can be cancelled at any time. In other cases, ESCOs require customers to enter into a contract for their purchase of electricity and natural gas. In some instances the contract requires the customer to commit to purchasing its energy from the ESCO for a specified period of time. The consumer selects the choice that’s best for them, which doesn’t necessarily mean the cheapest gas and electric or the best gas prices, but the product that best serves their needs.

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